Five months after Indonesian troops withdrew from East Timor, the world's newest country remains at what aid workers call ''ground zero''.

There is complete destruction, virtually everything has to be rebuilt and unemployment is around 90%.

Town after town has been thoroughly destroyed. The only comparison is with Europe after World War Two

Jose Ramos-Horta, East Timorese Nobel prize laureate

When East Timor voted to split from Jakarta last August, pro-Jakarta militia backed by Indonesian troops went on the rampage, torching everything they could.

Their scorched earth policy was intended to ensure that even if East Timor was independent it would have to start from scratch.

Last December the international community promised $522.5 million dollars for reconstruction, but so far the money has not appeared.

In the capital Dili, up to 100,000 people are living in burnt out roofless houses, yet there are still no cement mixers in sight.

However, it is not just a question of rebuilding people's homes. East Timor has no hospitals, schools, local police force, civil service or laws.

The country will rely on foreign handouts for some time

The militias destroyed water, power, transport and communication facilities. And the country does not even have a currency or official language.

Rebuilding East Timor presents an unprecedented challenge for the United Nations. In Gaza and Bosnia they at least had some basic infrastructure to build on.

The East Timorese themselves say they are starting from ''ground zero minus one''.

National currency

One of the UN's first tasks will be to help the East Timorese create a political and legal system strong enough not only to reconcile the shattered society, but also to create a stable environment conducive to private investment.

The transitional authority has already set up embryo ministries, there is a programme for training judges and a police academy under Canadian direction will begin taking recruits soon.

East Timor will also have to establish its own currency.

The money is beginning to flow, which means reconstruction
will begin in earnest and jobs will be created

Kofi Annan

At the moment there is a mishmash of Portuguese escudo, Australian and US dollars and Indonesian rupiah.

The UN has decided the US dollar should be the official interim currency.

Poverty line

Even under Jakarta's rule, East Timor had very little, with 30% of households living below the poverty line, double the rate in the rest of Indonesia.

The economy generated only about $100 per person in 1998 and much of the territory's public services were financed by the government in Jakarta.

East Timor has few developed natural resources and little industry.

Reconstruction: A long haul ahead

Coffee has traditionally been the biggest export, but the anti-independence militias destroyed much of the coffee crop.

Tourism was once touted as an economic ambition. But without infrastructure, that has now become a development dream.

Another potential source of revenue could be the Timor Gap, a stretch of seabed rich in natural gas to the south east.

But gaining access to it may be fraught with legal difficulties as Indonesia and Australia signed a treaty to explore the area in 1989.

Disillusioned

The UN's intervention to stop last year's bloodshed was widely welcomed by the East Timorese.

But the initial optimism is already turning to disillusionment and resentment.

Employment opportunities are almost nil. Last month there was a riot when around 7,000 people queued for 2,000 jobs with the UN, only to be told that they would only be hired if they could speak English.

The discontent is causing crime and gang warfare, but as yet there is no local police force. Vigilante justice is also spreading in the absence of any legal system.

The chief of the UN mission in East Timor, Sergio Vieira de Mello, has said employment is his number one priority.